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Approved loans and grants, 2d half of fiscal year 1964, as of Aug. 18, 1965-Ce

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DELINQUENT LOANS

Mr. ROONEY. How many loans do you have which are 6 months in arrears in payment? Can you give us that information?

Mr. WILLIAMS. I can give you loans which are delinquent 60 days, or more, but I cannot give you the 6 months' figure. Î will have to furnish that for the record.

Mr. ROONEY. We will be satisfied with the 60 days or more.

Mr. WILLIAMS. Twenty-three.

Mr. ROONEY. Do you have a list of them?

Mr. WILLIAMS. No, sir; I do not have a list.

Mr. ROONEY. What is the total money involved?
Mr. WILLIAMS. $3,966,000.

OTHER COSTS AND EXPENSES

Mr. ROONEY. According to page 51 of the justifications, you spent $880,000 in fiscal year 1965 under "Other costs and expenses." Do you have a breakdown of that $880,000?

Mr. LEWIS. No, sir, not with me. The largest share of this, sir, would be for the purchase of senior liens to avoid premature liquidation, but I do not have the exact figure.

Mr. ROONEY. Is this $880,000 an exact figure for 1965?

The

Mr. LEWIS. At the present time, 1965 amounts are not final accounting figures, but as best we know, this will be the final figure. figure should not change greatly when the final accounting information is available.

Mr. ROONEY. What would be your estimate of how much of the $880,000 was used for the purchase of senior liens?

Mr. LEWIS. I would expect it is at least in excess of 75 percent. Mr. ROONEY. What is your estimate as to the amount of the $1.3 million that would be used for the purchase of senior liens?

Mr. LEWIS. I would think there, again, it is probably in excess of 75 to 80 percent.

Mr. ROONEY. Are there any further questions with regard to the so-called economic development revolving fund?

(No questions.)

Mr. ROONEY. I must be doing all right when the minority does not ask any questions.

Mr. Bow. You always do all right.

Mr. ROONEY. Gentlemen, we have one more part to this entitled "Regional Economic Planning." Since there is a rollcall pending on the floor of the House, we shall now recess until 2 o'clock.

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Mr. ROONEY. The committee will please come to order.

Gentlemen, we shall this afternoon direct our attention to the last of the five items for the Department of Commerce contained in House Document No. 290. This is the one entitled "Regional Economic Planning," a request in the amount of $9.3 million.

We shall, at this point, insert in the record pages 2, 3, and 7 through 19 of the separate set of justifications.

(The pages follow:)

GENERAL STATEMENT

An appropriation of $9.3 million is requested in fiscal year 1966 for the Department of Commerce to perform the functions assigned to it under title V of the Public Works and Economic Development Act of 1965. Responsibilities of the Secretary under the act are to—

(1) Designate appropriate "economic development regions" (sec. 501). (2) Invite and encourage the States wholly or partially located within such regions to establish appropriate multistate regional commissions (sec. 502).

(3) Provide technical assistance which would be useful in aiding the commissions to carry out their prescribed functions and to develop recommendations and programs (sec. 505 (a)).

(4) Pay the full administrative expenses of each approved commission during the first 2 full fiscal years subsequent to their establishment, and 50 percent of the expenses thereafter (sec. 505(b)).

(5) Provide effective and continuing liaison between the Federal Government and each regional commission (sec. 503 (c)).

(6) Coordinate activities of the Federal cochairmen of the regional commissions.

It is planned to administer these functions through a new organization, the Office of Regional Economic Development, reporting to the Assistant Secretary of Commerce for Economic Development authorized by section 601 of the act. A detailed statement of the functions and staffing of this Office is covered in a separate section in the justifications which follow. Funds required by the Office for expenses of program administration are estimated at $900,000. The remainder of the appropriation request, or $8.4 million, will be dedicated to providing direct regional technical and planning assistance through the several alternative techniques authorized by the act. These include contributions to meet expenses of regional action planning commissions, special technical assistance projects related to organizing regional planning activities and solving planning problems, Federal staff participation in development of regional plans, and Federal participation in regional commission proceedings. Section 505 of the act places a limitation of $15 million annually on amounts to be appropriated for such technical and planning assistance.

The President's message on economic development pointed out that the Federal Government's program to assist depressed areas has taken on a new direction and another dimension. ARA's 4 years of experience revealed that in many cases an approach to redevelopment based upon individual county or township development just doesn't work effectively, since many of these areas individually do not have a natural economic area. Such economic areas, as a rule, are multicounty and multistate in character. Congressional hearings on the act took note of several interstate economic regions in which regional economic planning appeared to be needed including the upper Great Lakes region, the Ozark region, the southern Rocky Mountain region, and the New England region.

In the past, most regional efforts have been directed toward harnessing natural resources such as water or river compacts, conservancy compacts-or to provide for a specific public service-such as a school district or a sewer and water district. Lately, as shown by Appalachia, it has been demonstrated that a regional approach to general economic development can be achieved and can yield important values. The story of the concerted efforts to find a solution by the 11 Appalachian States is well known to Congress and the Nation. Interest in regional economic development planning is now emerging in other multistate areas and needs the Federal Government's participation and assistance.

In addition to funds for technical and planning assistance, the estimate provides sufficient funds to organize and carry on the work of up to eight regional commissions in fiscal year 1966. The act provides that each commission shall be composed of one Federal member, the Federal Cochairman, appointed by the President by and with the advice and consent of the Senate, and one member from each participating State in the region. Alternates are provided for both the Federal and State members. The commissions are empowered to appoint an executive director and such other personnel as may be necessary to enable the commissions to carry out their functions.

Section 505 of the act authorizes appropriations of $15 million annually for the fiscal years 1966 through 1970 for technical and planning assistance and the administrative expenses of regional commissions. The $8,400,000 under the activity, regional planning assistance, is chargeable to this authorization. Au

thorization of funds for program administration is found in section 708, which authorizes appropriations for sections of the act for which specific appropriatio authority is not provided. Section 708 also provides that funds appropriated under authority of the act may remain available until expended.

Consideration has been given to the portion of the fiscal year that has elapsed and of the delays encountered in establishing a new program in the developme of this estimate of appropriations for fiscal year 1966.

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The regional action planning undertaken under title V of the Public Works and Economic Development Act will be a cooperative enterprise among the participating States and the Federal Government. The act gives the Secretary of Commerce broad authority to promote and assist regional planning activities and to provide technical assistance to regional planning commissions. Such assistance may include studies and plans evaluating the needs of, and develop ing potentialities for, economic growth of the regions, and research on improv ing the conservation and utilization of its human and natural resources. Assistance may be provided by the Secretary through staff of the new Office of Regional Economic Development, by reimbursable arrangements with other Federal departments, through contracts with appropriate private, nonprofit, and other institutions, or through grants-in-aid to the commissions themselves. The Secre tary is also required by the act to pay all administrative expenses of each commission which is approved by him for a period of 2 full fiscal years following the commission's establishment. Thereafter, not to exceed 50 percent of such expenses may be paid by the Federal Government. The Secretary, through funds appropriated under this activity, will also pay expenses of the Federal Cochairmen and their staffs.

The Public Works and Economic Development Act clearly anticipates that the Federal Government will provide a large share of the initiative, leadership. and resources required to launch the regional planning experiment. As regional planning activities become better established, the act anticipates that the proportion of Federal participation will be reduced.

Because regional planning is still in the experimental phase, considerable latitude will be required initially in administering the program. For example, until definite criteria for regional designations have been developed and State and local interest in participating in regional planning programs has been surveyed, specific regions, or even the number of regional action planning commissions which will ultimately be established, cannot be determined, nor the number or subjects of the studies which they will wish to carry out, nor the exact dates at which they will become operational. The techniques through which the Secretary assists the planning activity will also need to be tailored to the particular aims and circumstances of the commissions, as they develop.

This budget estimate and the program's administration for fiscal year 1966 are based on the following assumptions:

1. Eight regional action planning commissions will be organized and in operation before June 30, 1966. Two of these will be large regions, each requiring a Federal contribution of approximately $350.000 annually, and six will be smaller regions, requiring approximately $275,000 each on a full annual basis. A tentative budget for one of the larger commissions is shown below.

2. It is assumed that on the average the commissions organized this year will be operational for about 4% months each.

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